Greek Economic Crisis: Impact on Charter Yachts?

The last few days of April saw the 9th edition of the Poros charter yacht show, an industry-only event. Brokers and media alike inspected the latest crewed yachts that will spend the summer in the Greek islands. Missy Johnston, owner of Northrop & Johnson Yacht Charters, reports that of the 78 boats on display, 28 were new to the crewed market, and eight of the 28 were new launches. She contacted me not just to share that bit of good news, but to convey how pleased she is with the quality of both the yachts and crew.

I had to wonder, however, whether the implications of that good news would be tempered when considered against the severe economic crisis in Greece. Even among American television stations that don’t give much coverage to international issues, there have been reports of the European Union’s bailout plan, plus scenes of demonstrations and riots in reaction to government cuts. I asked Johnston a few questions about the potential impact on crewed charter yachts cruising Greek waters this summer:

Q: Have any charter guests expressed concern about booking Greek charter yachts because of the severe economic crisis that country is facing?

A: Yes they have; however, the bigger concern has been from brokers, concerned about client fund escrow accounts in Greek banks that are holding charter funds. One Greek central agency company has the client funds account for charter funds in Switzerland, and I spoke with another company about doing the same, which they are looking into.

Q: Are bookings for Greece higher or lower so far compared to last year?

A: I don’t know if they are lower than last year, but they are still down, and this is one location in the Med where pricing is still flexible. There is not as much pricing flexibility as in other areas of the Med last year; however, in Greece the flexibility is still there, and discounts are offered.

Q: Is there any concern among brokers over the Greek economy? For example, have any of the usual cruising grounds suffered marina closings or losses of other businesses?

A: I have not seen this per se. The general feedback that I have been receiving is that the wealthy are still fine. The imbalance has been in the amount of taxes requested from all, including the wealthy versus the cost of government, i.e. the taxes are not at a high enough level for the cost of government. I did notice in Athens that some of the public services seem to have been cut back. There are a lot of bushes and weeds growing up through sidewalks and parking lots and other areas normally kept more manicured. Also there were more full trash dumpsters around. I think the islands are concerned, but I have not seen any specific closings, etc. Apparently Cabotage laws for cruise ships have been removed so that foreign-flag cruise ships can pick up and drop off in Greek waters, so that large cruise ships are not cruising through the islands in several days, but might stay longer, calling at more Greek islands so that more is spent, even if it’s just T-shirts. Some feel that the drop of the Cabotage laws included the yachts as well, or if not, will soon include yachts in order to increase tourism dollars to the Greek islands.